PV Crystalox Solar (LON:PVCS) saw its value more than double this morning after announcing a cash settlement over a terminated wafer supply deal that exceeds its market cap.
The group revealed that it has reached an agreement over the termination of the supply deal and will receive €90 million, which will be recognised as income in the first half this year.
Meanwhile, PV has reduced its first half guidance for shipment volumes to 55-70 megawatts (MW) from 80-100 MW previously, saying it was unable to reach agreement on acceptable wafer prices and volumes for the second quarter with its customers.
This was due to a 70 percent decline in wafer prices over the past year resulting from industry overcapacity and significant inventories.
Consequently, the group is sticking to its cash conservation strategy and will continue to operate at reduced wafer production levels, while polysilicon production remains suspended at its facility at Bitterfeld.
PV is also accelerating its cost reduction programmes.
“The group continues to believe that the medium-to long term outlook for solar installations is positive and therefore protecting the Group's capabilities and cash for the future remains of paramount importance,” PV told investors in a stock exchange statement this morning.
“The board will continue to review industry conditions on an ongoing basis in order to maintain the best interests of shareholders.”
Shares in PV traded at nine pence at 9:20 am this morning, up 110 percent from yesterday’s closing price of 4.27 pence. The company now has a market cap of £37.5 million.